Templeton funds have been one of the worst hit by the recent defaults and downgrades on Indian debt paper. In fact, the NAVs of 5 debt funds of Franklin Templeton fell by 3.4% on March 09, after the fund marked down its investments in bonds issued by ADAG group by 95%. In the case of another beleaguered company, Essel Infrastructure, Templeton fund has written down the value of the bonds by 85% post the “Default” classification by rating agencies. With a substantial exposure to the AT1 bonds of Yes Bank and there could be more such write-offs for FT Funds in the future too. Debt funds are the new risk.